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Testing my attorney's advice for filing Ch 13. Here's the facts - what do you think?

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    Testing my attorney's advice for filing Ch 13. Here's the facts - what do you think?

    $92,000 cc debt
    $130,000 co-signed student loans
    House with around $5k in equity (after 1st & 2nd mortgage of $395k)
    Car worth less than the $18k owed on it

    Two items - one cc with $18k and $18k car loan joint with my wife. The rest of the unsecured my wife is only an authorized user.

    Wife grosses around $35k/year - I am self employed and it's tough to get my arms around net, but after estimated taxes I may net $40k +/- (grossing hopefully $70k +/- this year).

    I only have $4k in savings and $6k in retirement money. Wife has $10k in savings. I'm 51 years old.

    I really slowed down on cc usage only the past several months. Within 90 days of filing did charge plane tickets to visit daughter who is in the Army (see other thread). No asset transfers or cc transfers in years, just using charge cards and paying with continued build up in debt.

    Attorney said I made too much for a 7, so 13 was my option. In my initial reserach I too thought I could only do a 13.

    I didn't plan for this. I have always been current on all of my payments, usually paying a little more than minimum payments each month on cc's. I just recently (2 months ago) stopped paying on 2 of my cc's trying to negotiate a payoff as I saw things spinning out of control. No cc company would reduce my rates - due to my high balances all my rates were increased to between 11% and 18%. I decided that cc negotiation was a bad path to take - I would have to pay taxes on any debt reduction. So with those facts attorney says File 13 so I did.

    I don't see any options. My wife has been sick for almost a year. In Feb she stopped going to work and took sick pay. She got paid the rest of the year but noit at the higher hours she worked so lost money there. During the summer months my wife doesn't work or get paid (she works in a school system) so that's a lot of missed income coming up. My self employment varies - some good weeks some bad weeks. This summer would be a disaster if I didn't make the move to file, at least in my mind.

    Thoughts?

    #2
    To be able to provide any guideance, we would need to know in which state you live and how many are in your household. Also, what is your house worth?

    But even if you could do a chapter 7, there may be some benefit to doing a 13 vis a vis the student loans, a chapter 13 keeps them in deferment for 5 years and buys you breathing room.

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      #3
      Originally posted by HHM View Post
      To be able to provide any guideance, we would need to know in which state you live and how many are in your household. Also, what is your house worth?

      But even if you could do a chapter 7, there may be some benefit to doing a 13 vis a vis the student loans, a chapter 13 keeps them in deferment for 5 years and buys you breathing room.
      MA. Just my wife & I as the "kids" are grown up and out of the house. House value around $400k but only $5k in equity.

      I was told my kids can pay down loans during my 13. Main reason this is important is my daughter gets an Army bonus for her 1st 3 years to pay down school loans.
      Last edited by fileda13; 06-27-2011, 12:18 PM.

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